Local Market Report

Lackluster Home Appreciation Halts Rebounds for Top 300 Markets

Homes.com’s Local Market Report for October reveals 39 out of the top 100 markets measured continued to show a complete price recovery – the same count in September’s report. A rebound of 100% or more means pricing for the market has surpassed its prior peak and reached full recovery. Provo-Orem, UT and Nashville-Davidson-Murfreesboro-Franklin, TN continue to inch towards a full recovery, rebounding at 99.95% and 99.40%, respectively. Additionally, the Midsized Markets Report for smaller markets (population rank from 101 to 300) highlights that 71 markets have rebounded more than 100%, down one from last month. Tuscaloosa, AL, a market first rebounding in March, has fallen out of rebound, posting a percentage of 99.95%. This brings the total to 110 (36%) of the U.S. markets achieving a full recovery. Slowing demand contributed to a flattening of price increases during the summer and fall months. Inventory increased as new product was made available in many markets. With winter approaching, typically a slow time for real estate sales, more markets may slip below the fully recovered level.

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The flattening of price increases was widespread and reduced the number of large markets reporting gains. Of the top 100 markets, only 58 markets increased their three-month average index point change in October, down 9 markets from September and 18 markets from August. In October, the monthly percentage gains ranged from a low of -0.41% to a high of 0.4% with Baton Rouge, LA having the highest gain of 0.4% followed by New Orleans-Metairie, LA with a 0.39% gain. Likewise, prices in the top ten markets are appreciating at a much slower rate than they were a year ago. The year-over-year gains in October 2014 for the top ten markets ranged from a low of 5.71% to a high of 7.63%, which is a slower rate of increase in these markets than noted at the beginning of the fourth quarter of 2013.

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In October, the decline in the number of midsize markets posting gains was only 14 of 133, which may indicate some smaller markets are seeing price appreciation in the short term, but over the long term may see stagnant pricing. Of the midsize markets, Rapid City, SD took the top spot annually while Wichita Falls, TX topped the three-month average list, each at 8.24% and 0.48%. Of the top three-month average gaining markets, nine are from the South and one is from the West. Annually, seven markets came from the West, while two came from the Midwest and one from the South. The average annual price appreciation for all mid-tier markets for October was 3.90%, down 53% from the average annual appreciation in October 2013, which was 8.36%. The markets in most of the areas of the West were hard hit by the recession and are regaining their housing price momentum due to the expanding economy.

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Could now be the time to buy or sell your home? Get more information about home value trends in your area in the Homes.com Local Market reports or check home values for your local area.

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Christine is the Content Marketing Coordinator for Homes.com. She's a small town girl at heart, who currently lives in Norfolk, VA with her husband and their fur baby. When she's not working, she enjoys cooking, decorating, traveling, and binge watching Netflix. As a proud Virginia Tech alum, she also loves cheering on the Hokies!